Americas

Chile on Edge as Argentina Curtails Gas Shipments

Nathan Crooks
The Santiago Times
Santiago, Chile
May 30, 2007

A girl looks at smog-covered Santiago from Cerro (hill) San Cristobal. Santiago is one of the most polluted cities in Latin America. (Photo: David Lillo / AFP-Getty Images)

Chilean government authorities and citizens alike worried Tuesday that the country could soon be "left in the cold" after Argentina once again suspended all natural gas exports to Chile. Due to the severe cold wave affecting both Chile and Argentina, Argentine authorities closed the trans-Andean natural gas duct Monday and redirected the gas toward Buenos Aires where demand for residential heating has increased.

Natural gas still currently remains in the pipeline, but Chile may face a widespread residential cut if the supply is not quickly re-established. Government authorities said present gas supplies would meet the demand for water heating and cooking, but warned that not enough gas would be available for residential heating.

Most businesses have already been unable to obtain natural gas and have been forced to switch to heavier diesel-based fuels, greatly increasing smog in Santiago.

The Argentine gas cut comes days after a high-level Chilean delegation of Socialist Party members met with representatives of the Kirchner government and were promised that Chile's natural gas residential needs would be met.

Chile's Minister of Energy Marcelo Tokman announced the new gas cut with a short statement Monday night. "At the moment, no gas is arriving from Argentina," he said. "And it appears that the cut will last at least through Wednesday."

Argentina's actions surprised most energy experts. "Argentina is going too far," said former economic minister Jorge Rodríguez. "They are pushing this to the breaking point. While Chile imports nearly 80 percent of its natural gas from Argentina, that amount only represents one percent of Argentina's total consumption. They are directly damaging Chile when they could really send a positive signal by sacrificing 1 percent of their consumption."

María Isabel González, a former executive in Chile's Ministry of the Economy, also said Argentina was acting without sufficient grounds. "Their actions are extreme for the amount of gas involved," she said.

Santiago currently requires 1.5 million cubic meters of the clean burning fuel during winter months, but in the face of an Argentine gas cut off, only 800,000 cubic meters will be available even if all government contingency plans are activated.

Chile's National Energy Council, meanwhile, announced it was developing plans to allow power companies to offer incentives to consumers for saving energy. "With all the current energy difficulties, the best thing we can do is to urge energy conservation, both in terms of natural gas and electricity," said government spokesperson Ricardo Lagos Webber.

González, meanwhile, said Chile needed to create long-term plans because the situation would only get worse. "Argentina is not doing anything in terms of exploration, and their reserves are not going to get any larger," he said.

One short-term solution for Chile could be to purchase unused natural gas contracts that Uruguay holds with Argentina. According to La Tercera, however, Kirchner is unenthusiastic about allowing Chile to redirect Argentine gas from Uruguay back through Argentina and into Chile.

For several years now, particularly since Kirchner took office, Argentina has privileged domestic demand over exports in peak consumption winter months and has prevented new contracts with Chile's gas suppliers to be brokered. Allowing Chile access to Uruguay's unused gas supply would undermine Kirchner's policy—one favorable to Argentines during an election year.

Uruguay signaled that it is open to negotiations with Chile.

While Chileans may or may not find themselves without heated homes, the gas cut is already drastically harming Santiago's air. The capital city's winter skies are smoggier than ever, and former President Ricardo Lagos blamed the city's contamination levels on Argentina's unwillingness to provide Chile with more natural gas.

Lagos, recently named one of three special climate change ambassadors by the United Nations, said Monday that Santiago's air would not be clean until a reliable supply of clean-burning natural gas could be found. "If you analyze what is going on with the gas we get from Argentina, you'll understand the situation," he told Environmental Minister Ana Lya Uriarte.

"When you take away the gas, industry has to use the petroleum products that they have available," Lagos said, before adding that he would not comment on possible solutions.

Santiago residents faced this year's first environmental "pre-emergency" situation early this month, as air contamination reached its highest level since 1999.

"Of all current medical consultations, 10 percent are caused by air contamination," said Pedro Astudillo, chief pediatrician at the Indisa Clinic in Santiago.

From The Santiago Times.




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Chile on Edge as Argentina Curtails Gas Shipments

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